Alan Farrell (Dublin Fingal, Fine Gael) | Oireachtas source

I am pleased to have the opportunity to contribute on this Bill. I could not agree more with Deputy Murphy's reference to non-conforming use. There are quite a number of non-conforming properties that have residential zoning but commercial use, but since they are over the 12 year limit, councils cannot pursue them. We should pursue that issue. I drafted a Bill on this subject a number of years ago to try to capture these cases because they are inherently unfair, as Deputy Murphy correctly pointed out.

We all understand that the collection of commercial rates is integral to funding our local authorities across the State in combination with the local property tax. When addressing commercial rates, we have to be cognisant of the responsibility to ensure that we do not put an unnecessary burden on or detract from the viability of small businesses that populate our country. This Bill provides important measures to ensure rates are paid to the local authority, for example, the provision which places an obligation on the owners of commercial property to ensure any unpaid rates are paid prior to the sale of the property. For the reasons that have been outlined by some previous contributors, that presents issues.

The next point is important in the context of this Bill and any future legislative changes in this area. Local authorities should have the discretion to pursue matters where it is appropriate and fair to do so. Businesses may inadvertently rent a property, as has happened on a number of occasions. It is very unfair that a property owner or the next tenant in a property is stuck with somebody else's bill. Some local authorities deal with this differently but from a legislative standpoint, we should provide uniformity across the board. I heard in the Minister of State's speech that some local authorities in Dublin and another city permit a reduction of up to 50% in such cases, whereas some local authorities are permitted to provide a 100% waiver for vacant properties. We need to address these issues. If we want to incentivise companies from overseas to locate in Ireland, we have to give everybody a level playing field so that other local authorities can compete with Dublin and rural areas can compete with urban areas or regional cities.

It is important that local authorities have the certainty the rates system provides and which this Bill will enhance with regard to the appropriate level of maintenance of existing amenities for the benefit of all, not only the business community, but also residents. The completion of such works would be significantly hindered without the collection of commercial rates. I note that the legislation provides local authorities with the means to introduce targeted rates alleviation schemes or waivers. The purpose of these waivers is to support the implementation of national or local policy objectives. I understand that is being done with policies such as development plans and national planning policy in mind. Perhaps consideration should be given to the use of similar waivers in various policy areas.

I wish to raise a matter I raised previously with the Minister for Housing, Planning and Local Government, Deputy Eoghan Murphy, and the Minister for Finance, Deputy Donohoe, concerning childcare providers. As Chairman of the Committee on Children and Youth Affairs, I can say that most childcare providers pay commercial rates on the facilities that they use and this can have a significant knock-on effect on childcare costs for parents. It may put pressure on pay levels for staff in certain instances. Too often in this House, we talk about the need to actively tackle the cost of childcare, which can be equivalent to a second mortgage payment for many families. We discuss empowering people to return to work, yet childcare costs can constitute a significant barrier to parents and guardians getting back into the workforce.

Perhaps in addressing the cost of childcare we should examine the possibility of making changes in respect of commercial rates for childcare operators. This should be done in order to examine in particular providers in Dublin and other urban areas where commercial rates can have a detrimental impact on the affordability of both operating costs and subsequent costs for families. Where childcare providers pay commercial rates on their facilities, it is inevitable that these costs are passed on to families in the amounts they are charged for the services they receive. This fact is not really deniable. Furthermore, the fact remains that the rate of pay received by many workers in the childcare sector remains very low. Given the overheads that service providers face, they may not have sufficient profits to increase the wages of many workers as a result of measures to cover such costs and to ensure that families are not priced out of their services. I appreciate that this issue rolls into the remit of the Department of Children and Youth Affairs in terms of subsidies and support payments, but it is a small thing that can be done. There are an awful lot of small childcare providers out there that are registered with their local childcare committees and that pay rates. A little like the exemption of approved housing bodies from the registration of a property with the Residential Tenancies Board, RTB, for instance, which I suggested on Second Stage of a Bill before the House last week, in certain instances one must look at State service providers or quasi-State service providers and give them a break because it would have a knock-on effect in the cost to families.

I understand that Fingal has been referred to on a number of occasions this evening as having the highest rates collection profile in the country. I welcome this as a former councillor in Fingal and indeed one of its local Deputies. However, Deputy Catherine Murphy touched on one of the reasons for this, that is, that Fingal has one of the lowest rate levels in the country. One could counter this by saying that because it is one of the newest, fastest-growing local authorities in the State, with all that fresh developable land on which commercial parks among other things have been delivered, all these businesses are relatively young and are therefore used to paying their rates and that they are different from businesses on high streets in provincial towns and so on. I do not necessarily accept this point, but it should be borne in mind that as part of the revaluation process being updated in this Bill, which I welcome, it is still the case that two adjoining counties could be revalued nine years apart, if I am not mistaken. This is a problem and was a problem when the revaluation occurred in 2006, I think, in Fingal. The property market crashed in 2008 and, clearly, people in Fingal felt a little aggrieved that their businesses were being revalued at the top of the market and only a few short years later businesses were shutting up shop all over the place. There are issues with the revaluation process, but when it comes to two counties that adjoin each other, if one is valued in 2019 and the other in 2025 and they are so far apart in the intervening period, the county that is revalued this year might have an unfair competitive advantage over its neighbouring county. I understand and fully respect the fact that it takes time to revalue a local authority, as Deputy Catherine Murphy highlighted in her contribution when she spoke about the man on horseback who took 20 years to value the State. The point, however, is that we are a little more enlightened now and have more technological solutions available to us. It is possible for us to resource this a little more in order to get something more out of it in the long term. I would welcome the Minister of State's observations on this either in his summation this evening or whenever the Bill should come back before us for its next stages.

It would be remiss of me not to use this opportunity to highlight some of the difficulties in making a valuation in terms of the commercial rates for local authorities, particularly in the case of Fingal. I will give the Minister of State the example that occurred recently when setting the discount on the LPT in Fingal in September of last year. A few months later, Fingal County Council presented its annual budget and found an additional €8 million, I think, which it probably did not need to pass on to the local property tax payers. I think this additional sum of money had been pre-booked for something but was not expended. The long and the short of it is that the local property tax variation rate of minus 10% could have been the full minus 15%, which would have made a big difference to local property tax payers in my county. However, the councillors made a decision, which was too early by two months in my view, and the financial position adopted by the local authority at its annual budget in December was different from that presented in October and local property tax payers across Fingal were thus caught out. In the context of this Bill and the commercial rates, the knock-on effect for the commercial ratepayers in Fingal was that Fingal County Council did not, to the best of my knowledge, adjust its commercial rate level, despite the fact that it had additional funding. I would like to see a little uniformity in this regard. I appreciate entirely that this is not applicable to this Bill, but the overall funding of local authorities is encapsulated by the Bill and the Department should therefore consider it in the long term.

Another issue I would like to touch on is shopping centres, specifically the grading at which rates are applied depending on the location of one's business in the shopping centre. I am not entirely sure that there is a waiver or a scheme for such matters in this jurisdiction. I am aware from inquiring with a colleague of mine in a local authority in Spain that this is done there, that the business at the front of the shopping centre pays a higher rate than the one at the back because the latter does not get the throughput or the footfall. I am not aware of the position here, so perhaps the Minister of State could enlighten me as to whether it is the case that this approach can be taken by Irish local authorities. If not, we need to make it available to local authorities to review commercial rates as they apply to shops at the back of shopping centres because, obviously, they do not get the same throughput.

Finally, I re-emphasise the importance of capturing non-conforming uses, if legally possible - I hit a legal roadblock myself when I was drafting this Bill a number of years ago - particularly when a residential property is operating as a commercial property. I have even seen retail operating out of properties that are houses according to planners but retail units to everyone else. They are not paying rates and they should be. We should look into that. I thank the Minister of State for presenting the Bill.

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